Why Jewelers Are Still High on Low-End Items

September 18, 2015byRob Bates

Ten years ago, most fine jewelers wouldn’t think of stocking items like beads or charms. Then the economic roof fell in, and many credit brands like Pandora (and gold-buying) with saving a lot of jewelers’ hides during the dark days of the recession.

When the clouds parted, some expected that jewelers would return to normal. After all, some of these lines require lots of time and manpower, and generate a fraction of the revenue of a big diamond sale.

Yet, years later, the low-end part of our industry, particularly charms and silver, remains one of the most vital and active parts of our business.

It helps, of course, that there are now several major brands in this territory, with major advertising budgets. Now-public Pandora remains the biggest name in charms, even as it’s increasingly moving toward controlling its distribution.

Nipping at its heels is Alex and Ani, which has private equity backing; recently, it followed Pandora into Jared, and it’s poached some of its top salespeople.

While the two brands could be called competitors, they are mostly geared to different audiences, say jewelers. Alex and Ani has lower price points and draws a younger consumer than Pandora, though both lines often demonstrate across-the-board appeal. Certainly, neither brand has been hurt by the success of the other, as both have shown tremendous growth lately.

We are also seeing a host of intriguing newcomers, including Thomas Sabo and Endless. JCK also heard positive talk about Bourbon and Boweties, Kendra Scott, and Moon and Lola. (Chamilia, purchased by Swarovski in 2013, has seen a marked decrease in buzz.) Most jewelers believe the trend is here to stay.

“When every jeweler jumped on the Pandora bandwagon, it opened our eyes,” says Shane Woodruff, owner of Crocker’s Jewelers in Texarkana, Texas. “We spend all this money for marketing to increase store traffic. Pandora can increase your store traffic. And people who come in to buy these lines often buy other things.”

The key, Woodruff says, is making sure customers get a taste of what else in the store.

“When people say it doesn’t work, I ask, ‘What is your system?’” he says. “Are you really keeping up with how often your people are showing something else? If you don’t do it intentionally, it is not going to work. You have to have a plan. It has to be a requirement.

“We recently had an Alex and Ani customer come in for a $26 bracelet who then bought a $30,000 item,” he adds. “That happens all the time. I recently read that the average person buys gifts for eight people. If they buy a thousand-dollar bracelet for someone, what are they going to get the other seven people?”

In addition, many jewelers are still struggling with how to connect with choosy, ever-fickle millennials. These lines are an easy way to put out the welcome mat.

“We need things like this to attract younger consumers,” says John Carter, president of Jack Lewis Jewelers in Bloomington, Ill. “It just adds an air of approachability. You can’t sell anyone anything if they have resistance to coming in the door.”

“The millennial customer that everyone is trying to go after and attract wants affordable price points,” he says. “The fancy things I see people wearing are mostly high-end watches. It is very a minimal movement with the kids these days. Everything is fine, petite, very lariat. It is not big and bold.”

Plus, the best of these brands are not only fashionable, but also connect with the core of what makes jewelry such an enduring purchase: emotion. Carter says Alex and Ani’s secret weapon is the inspirational cards that accompany the pieces.

“A lot of women will pick a bracelet because the card commemorates someone,” he says. “I’ve seen it help it their grieving process. I’ve never seen that happen before. The jewelry is 80 percent of it but the card is the 20 percent that binds it together.”

Besides, the different tiers of jewelry are more complementary than it might first appear. Carter often sees customers wearing Alex and Ani pieces alongside higher-end items.

“I gave my wife a diamond bracelet and she never wore it until I gave her an Alex and Ani piece,” he says. “As a jeweler, it just drives you nuts. As a husband, I’m just glad she’s wearing it.”